Billions for millions: How the government relieves the Germans – and what is to come

Billions for millions
How the government relieves the Germans – and what is to come

By Max Borowski

Energy money, children’s bonus, tank discount: In order to alleviate the burden of rising prices for citizens, the federal government has already distributed billions to around a dozen individual measures. Further relief is already in the works. An overview.

The chancellor has promised, and numerous proposals are already coming from parties, associations and experts: the federal government will launch another relief package to cushion the exploding energy costs for consumers. It is already the third package of measures of its kind this year alone. While the government is already working on the next steps, some of the relief from the first decisions in spring have not yet reached the citizens. Or some of them have already been forgotten.

As the RTL/ntv trend barometer recently determined, the majority of the population has the feeling of having lost track of the numerous measures taken by the federal government. 78 percent of those surveyed by the opinion research institute Forsa stated that they “can’t see through it anymore”. According to the trend barometer, a small minority of seven percent feels noticeably relieved. 61 percent of those surveyed even said they felt no relief at all, although relief for taxpayers, child benefit recipients, drivers and public transport users – i.e. probably the majority of the population – has already come into force.

which has already been decided

For all those who have lost it, here is an overview of the aid that has already been given, what has already been decided and what is still being debated:

As part of the first relief package in February, the federal government decided on several tax relief measures that came into effect retrospectively as of January 1st. Of the employee lump sum and the Long-distance commuter flat ratethat taxpayers can claim on their tax returns have been raised. In addition, the basic allowancewhich employees should already have noticed on their monthly payslip.

In July, the Abolition of the EEG surcharge came into force, which relieved electricity customers of 3.72 cents per kilowatt hour. In addition, the federal government paid one heating allowance of at least 270 euros per household to housing benefit recipients. Recipients of basic security or unemployment benefits also received in July single payments from 200 euros. With the child benefit, the federal government paid a “child bonus” from 100 euros per child. For children affected by poverty there is a “Immediate surcharge” from 20 euros per month.

A one-off energy price lump sum or energy money for all employees subject to income tax. Employees are to be paid the 300 euros with their September salary. In the case of the self-employed, the advance tax payment is reduced accordingly.

The regulations that have been in force since June have been in force for almost three months and are now almost at an end 9 euro ticket and the as tank discount known reduction in energy tax on petrol and diesel. While the fuel discount, which was politically controversial from the start, will soon be history, there is still a struggle to find a successor to the 9-euro ticket. All in all, the volume of government relief from these first two pacts is estimated at around 30 billion euros.

What is to come

Finance Minister Christian Lindner has also given relief as part of a Inflation Compensation Act for income tax announced, which should compensate for the cold progression, the additional burden caused by inflation. According to Lindner, a total of 48 million taxpayers should benefit from this. For the state treasury, this means a waiver of an estimated ten billion euros. A further increase in child benefit is also included in Lindner’s proposal. The bill has not yet been decided. While Chancellor Olaf Scholz signaled “fundamental goodwill” for the plans, MPs from the SPD and the Greens have criticized the weighting of the relief for low and high earners.

These reliefs, which have already been decided or are foreseeable, are to be followed by further ones. The traffic light coalition is working “day and night” on the next package. At least that’s what the chancellor said at a public dialogue last week.

Part of the upcoming package is likely to be a new energy money be. Unlike the first tranche, which will now be paid out in September, the group of people is to be expanded. Not only employees subject to income tax, but also pensioners, students and other groups should be taken into account. Not only do social organizations and the opposition want that, but also the Chancellor. There are also demands that the amount should be significantly increased and socially graded in view of the sharp rise in energy prices since the spring. From the left came calls for high one-off payments per household, around 1,500 euros. The economist Marcel Fratzscher also suggested paying out energy money not just once, but monthly for a period of one and a half years.

Also already announced by the chancellor is the housing benefit reform. She should come at the turn of the year. According to Scholz, the rent subsidy for low-income households should not only be increased, but above all the group of those entitled to receive it should be expanded and a heating cost component introduced. Welfare organizations are calling for a permanent adjustment to the rental trend.

In the spring was the proposal of economists for a Price cap for a basic energy requirement still unheard. Now the SPD has included the idea in its proposal for the upcoming relief package. Accordingly, the energy prices per household could be limited for minimum consumption. The state would have to pay for the difference to the market price. Consumers would then have to bear the full costs for everything that is consumed in excess of this. The procedure would have the advantage of protecting consumers from the full brunt of the energy price shock.

The traffic light coalition had planned to introduce one anyway citizen money instead of the previous Hartz IV system. In view of the particularly heavy burden on poor households from inflation, social organizations are calling for a drastic increase in payments as part of the changeover.

A lot has been demanded and yet it is highly controversial Successor to the 9-euro ticket. A comparable 29-euro ticket for local transport is being discussed as a possible successor arrangement. The Association of German Transport Companies proposes a long-term, nationwide monthly ticket for 69 euros. A 49-euro ticket can be found in the SPD discharge paper. Financing remains the sticking point. The transport associations also state that it would take more time to develop an alternative cross-association offer.

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